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HSBC embraces Open Banking and aggregation platforms

  • Hannah DurevallBy Hannah Durevall, 
  • October 19, 2017

It has been announced that HSBC’s subsidiary, First Direct, is set start trialling a new platform as part of HSBC’s Open Banking strategy. The platform will allow both customers and non-customers to integrate their financial information into the app and access other financial tools and providers. This latest strategic move has been enabled by a partnership with FinTech start-up Bud.

Raman Bhatia, head of digital, UK and Europe at HSBC UK, says: “The First Direct trial and the launch of HSBC Beta allows us to test, learn and develop in a live environment, and then deploy the new technologies at scale.”

This move by HSBC comes soon after the bank’s announcement that it was testing out a new platform app for its own brand. Similarly, it will allow its users to manage all their bank accounts in one place. Expected to launch early next year, the app is said to be able to integrate with 21 different financial services providers in the market.

As new European regulation will enable FinTech companies to use banks’ APIs, the battle will be over the customer experience.  Banks could either allow account aggregators to take ownership of the user interface, and therefore also the customer experience, or they could create an own-branded platform to retain the ownership. HSBC has decided to rise to the challenge.

App Features

In an event held by HSBC in September, it showcased its new app. The bank is targeting the customer segment that is most likely to try out new apps from Fintech competitors: ‘Millennials.’

HSBC Beta will show its users an overview of all their financial accounts, which are visible in their online bank: current accounts, loans, mortgages and savings.

HSBC Beta app - financial overview

Similar to most challenger banks and non-bank account aggregators, the app offers spending categorisation.

HSBC Beta app - spend categorisation

The bank has also cherry-picked savings features for its app, from the wider market. ‘Safe balance’ shows the available funds left until the next payday. It is calculated based on upcoming bills and estimated spending.

HSBC Beta app - Savings features

‘Automated round-ups’ does what it says on the tin: rounds up all transactions to the nearest pound, saving the difference.

Savings ‘Goals’ and ‘Guilty pleasures’ are next on the list. While there is nothing particularly new about these features, they will still be welcomed by HSBC’s existing customer base – the bank presumably feels it doesn’t need to reinvent the wheel to improve its offering.

What’s next?

Over the past few months, the HSBC Beta has been trialled by 200 banking customers and this month HSBC will be testing out the app with 10,000 customers.

The First Direct trial will run for six months, starting in December 2017, supporting 2,000 First Direct customers and up to 4,000 non-customers, as reported by our sister company Banking Technology.

Although there are already players out there eager to get a slice of the customer experience pie, incumbent banks, like HSBC and First Direct,  will have a head start thanks to its existing customer base… and the fact that these customers might be reluctant to share their data with FinTechs, without the same history or legacy as the bank.

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